GrainCorp is Hockey’s call alone: Abbott

Tony Abbott
has rejected suggestions that he is poised to intervene and veto any decision to sell
GrainCorp
.

The Prime Minister’s office said ­foreign investment was a matter for ­Treasurer
Joe Hockey
and he would make the decision alone.

The denial was issued late Friday after a report citing anonymous sources said Mr Abbott opposed the sale to US agribusiness Archer Daniels Midland and would intervene if Mr Hockey decided to sell.

On Thursday, GrainCorp reported a 31 per cent fall in net profit to ­$141 million. One investor said while the result was weak, the share price move on ­Friday was related to nervousness in the market that the government would block ADM’s proposed ­$3.4 billion takeover.

The stock is dominated by hedge funds, which have become increasingly nervous in the past week as political critics of the deal continue to voice their outrage.

The report on Friday rang alarm bells from New York, to Hong Kong, to Sydney, and caused a plunge in the GrainCorp share price.

At the close of trading, the share price had fallen 4 per cent to $11.70, the lowest in 15 months.

Hedge fund representatives had been in Canberra during the week, along with other lobbyists and ­interest groups.

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As Treasurer, Mr Hockey receives advice from the Foreign Investment Review Board and then makes a final decision, taking into account the national interest.

Sources close to the Treasurer said he had not made up his mind and while he would obviously canvass his ­decision with Mr Abbott and others, “there was no way Tony was going to overrule Joe on something like this. He has a very open mind still".

The issue is splitting the Coalition, with rural Liberals and Nationals opposed to the sale and most Liberals in favour. Any rejection would challenge the Coalition’s mantra that it welcomes foreign investment and that “Australia was “open for business’’.

Investors first became seriously worried when Nationals leader and Deputy Prime Minister Warren Truss went public two weeks ago with a strong denunciation of the proposed sale.

The report on Friday that Mr Abbott, too, was opposed accelerated the ­concern and investors hit the phones trying to understand the internal politics of the Coalition.

The source close to Mr Hockey said Mr Truss did not make his comments with the approval of Mr Abbott, as has been claimed, and that there was anger at senior Liberal levels at Mr Truss’s comments.

“There’s no way Truss got cover to make those comments,’’ he said.

Mr Hockey is assessing ADM’s suitability and when he said last week he would not be “bullied’’ into making a decision, that comment was aimed as much at ADM as it was at the Nationals and others applying pressure.

It is understood that Mr Hockey became angry at ADM when it lobbied him incessantly when he was in the United States a month ago.